The social security funding bill

The members of parliament have been considering the social security funding bill for 2020 since 22 October. Several measures could come into effect on 1 January 2020.

The special purchasing power bonus (also known as the “Macron” bonus)

The bill provides for a continuation of the special purchasing power bonus that was introduced in December 2018. This bonus is exempt, for up to € 1,000 per beneficiary from:
– income tax;
– all social security contributions (both for the employer and the employee);
– the construction contribution and all contributions payable in respect of on-the-job training.

The scheme would be extended into 2020 entirely, with a few amendments. The exemption would be allowed only where the bonus is paid during the first half of 2020 and if the employer has set up a voluntary employee profit-sharing agreement by the date it is paid. As an exception to the rules on voluntary employee profit-sharing agreements, agreements entered into during the first half of 2020 may only have a term of one year (rather than three years, which is the norm).

As before, the bonus would be exempted only for employees who received compensation that is less than three times the annual minimum wage (“SMIC”). It would still be possible to modulate its amount depending on the beneficiaries (classification level, actual working time over the previous year) as long as such modulation does not entail discrimination. The bonus may still not be used to substitute for an element of compensation.

Enhancement of the powers of audit officers

Officers charged with countering undocumented labour would now be able to use reports of undocumented labour produced by partner audit bodies. Officers from a specific scheme would be able to carry out checks on behalf of several bodies that belong to different branches of social security and different social security schemes to provide better action against undocumented labour and thus increase the openness of information within the various bodies. The manager of one body would therefore be able to use a report produced by an audit officer of a different body as the basis to collect the contributions owed by the company.

The end of the Social Security Declaration by Independent Workers

The social security funding bill includes the elimination of the need for independent workers (e.g., an individual contractor, a majority manager of a private company) to fill out the Social Security Declaration by Independent Workers (“DSI”).

To address the wishes of independent workers, and to simplify administrative measures, the DSI would be eliminated in favour of one additional piece of information to be supplied when the income tax return 2042 C PRO, which is already filled out by independent workers (except for those workers under the micro-social scheme) is filed.
Once the DSI is rolled into the income tax return, Bercy would be responsible for passing on to URSSAF the details used to calculate the social security charges.

This measure is scheduled to apply starting with the income tax returns filed in 2021 for 2020 income.

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